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Bankruptcy brush led to growth cap

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POSTED February 20, 2010 2:30 a.m.
Home after home seemed to pop up overnight in the mid 1980s in Manteca putting a strain on services.

The city was still recovering from a near-bankruptcy episode in 1980 when the budget reserve was a razor-thin $1,800. Manteca’s financial trials and tribulations were heavy on civic leaders’ minds during the building boom of 1984 to 1987. They didn’t want a repeat of the 1980s experience that forced the city to leave the just completed Louise Avenue fire station unopened because they couldn’t afford to staff it while city police were using old CHP cars with excess of 70,000 miles on them when the city took delivery of them as primary patrol units.

Many residents shared the concern that Manteca was growing faster than basic services could keep up with. The sentiment was Manteca was growing too fast as neighborhoods such as Mayors Park in the triangle formed by the railroad tracks, Louise Avenue and Union Road seemed to develop overnight.

The peak of the mid-1980s housing boom saw 1,600 single family homes built to push the city’s population growth up an astronomical 12 percent in one year. There were real fears the cultural fabrics that held the city together would be destroyed by not just the inability to keep pace with services but also the difficulty of absorbing large sums of new residents year after year.

It is against this backdrop that a debate emerged to manage growth by capping the number of sewer allocations the city could issue in one year. One faction viewed 2 percent as reasonable while another - enjoined by builders - advocated 4.5 percent. The City Council in 1988 settled on a 3.9 percent cap. It was perceived as a reasonable compromise and Ordinance No. 800 - the Growth Management Ordinance - was implemented

The ordinance -the first growth restriction of its kind in the Northern San Joaquin Valley - went into effect just as the economy started receding. It would take 12 years before the cap would be reached in a particular year to effectively stop issuing sewer connection allocations.

Why sewer allocations
Tying into sewer allocations was viewed by legal experts and civic leaders at the time as the easiest way to implement a growth management plan.

Ordinance No. 800 was put into effect on Aug. 16, 1988 as the guideline for how the first phase of the municipal wastewater treatment plant expansion would be utilized to divide sewer capacity. It was subsequently extended in future years to govern how the second phase of the treatment plant would have its capacity parceled out.

A percentage was set aside for every category in terms of how much capacity of the plant would be allocated to a particular use. Those percentages set aside 60 percent of the overall capacity to housing with no distinction being between apartments, single family homes, duplexes or mobile homes. The other categories -schools, industrial, retail and office divided the rest of the capacity.

Retail growth not only was viewed as desirable for residents who had limited shopping options but given sales taxes are a major component of general fund revenue  needed to finance police, fire and other services.

Perceptions vs. reality
Based on the intent and the actual wording of Ordinance No. 800, city leaders view the growth management plan as a success.

That, however, isn’t a universal view. There are those who believe the city is abusing the sewer allocation restrictions even though a legal opinion by outside counsel six years ago reconfirmed that the sewer allocation policy is being followed correctly.

Perception that the growth management plan is governed by building permits has led to confusion.

Legal counsel steered the city toward using sewer allocations and not actual building permits when the ordinance was implemented due to ease of tracking as well as the economic realities of moving any development project forward.

City leaders were acutely aware of the cyclical nature of the economy having gone through rough times earlier in the 1980s when the city was on the verge of going broke and unemployment soared because growth had slowed to a standstill.

How it works
That philosophy plus the practical issue of monitoring a growth management program led to tying it to sewer allocations.

To determine how many sewer allocations can be issued during a calendar year, city staff inventories all housing units existing in the city and multiplies it by the 3.9 percent factor to come up with how many sewer allocations - not connections - can be issued in a given year.

For the current year ending Dec. 31, that means the city can’t issue more than 901 sewer allocations for housing units.

There is a fine distinction between sewer allocation and sewer connections. Allocations are on paper while connections are the actual tying in of new homes to the system.

That is why in 2000 the city reached the sewer allocation cap for housing of 656 units that year and stopped issuing more allocations but building permits for 1,079 new homes representing new connections to the sewer were issued.

There was never any language or intent to prevent developers from carrying over allocations from one year to build in future years.

As a practical matter, the number of housing units actually built over the 14-year period since 1988 when the growth management plan was implemented has been under 3 percent annually.
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